2021 Rate Changes

Every year, I spend months painstakingly tracking every insurance carrier rate filing for the following year to determine just how much average insurance policy premiums on the individual market are projected to increase or decrease.

Carriers tendency to jump in and out of the market, repeatedly revise their requests, and the confusing blizzard of actual filing forms sometimes make it next to impossible to find the specific data I need. The actual data I need to compile my estimates are actually fairly simple, however. I really only need three pieces of information for each carrier:

  • How many effectuated enrollees they have enrolled in ACA-compliant individual market policies;
  • What their average projected premium rate increase (or decrease) is for those enrollees (assuming 100% of them renew their existing policies, of course); and
  • Ideally, a breakout of the reasons behind those rate changes, since there's usually more than one.
  • In 2015, I projected that the overall average rate increases for 2016 would be roughly 12-13% nationally. It turned out to be around 11.6%.
  • In 2016, I projected that the overall average rate increases for 2017 would be roughly 25% nationally. It turned out to be around 22%, but that only included on-exchange Silver plan enrollees across 44 states (I included all metal levels, both on and off exchange, across all 50 states).
  • In 2017, I projected that the overall average rate increases for 2018 would be around 29% nationally, and that 60% of that would be due specifically to deliberate Trump Administration actions designed to sabotage the ACA markets. It turned out to be around 28% nationally.
  • In 2018, I projected that the overall average rate increases for 2019 would be around 2.8% nationally, and that premiums would have dropped around 5.4% on average if not for the ACA's individual mandate being repealed & short-term & association plans being expanded. Hhealthcare think tank Avalere Health came to almost the exact same estimates on the actual rate changes, while Brookings Institute healthcare analyst Matthew Fiedler concluded that unsubsidized ACA individual market premiums would indeed have dropped by around 4.3% nationally on average in the absence of mandate repeal and expansion of #ShortAssPlans.

In other words, I've had a pretty good track record of accurately projecting average premium increases for the upcoming year for five years in a row. With that in mind, below you'll find a table tracking the state-by-state preliminary and final rate changes for the 2021 ACA-compliant individual (and sometimes small group) markets. Scroll down for individual state entry links.

For 2021, the biggest new factor is, of course, the impact of the COVID-19 pandemic on both 2020 and 2021 medical claims expenses. I've added a new column which attempts to separate that out, though not every carrier does so, while some simply refer to the impact of COVID-19 in a fairly vague way.

(click image for higher-resolution version)

I've acquired the preliminary 2021 rate filings for Georgia's individual and small group market carriers. There were two filings submitted for many of the carriers because of a (since delayed) ACA Section 1332 waivier submission; the carriers submitted one in case the waiver was approved and a second if it wasn't. Since the process has been delayed, however, the no-waiver filing is the one which is relevant.

As you can see in the tables at the bottom of this entry, the overall weighted rate change requested by individual market carriers in Georgia is a 1.3% reduction, which would have been more like a 2.3% drop if not for the COVID-19 factor, according to the carriers. The small group market carriers are requesting an 11.1% average increase, which is unusually high these days. I haven't reviewed all the memos for the sm. group market to see what they're pinning on COVID-19, however.

Here's what the indy market carriers have to say about the COVID-19 factor in their 2021 filings:

ALLIANT (indy):

Yesterday the Pennsylvania Insurance Dept. posted the preliminary 2021 rate filings for the individual and small group markets. On the surface, it appears that Pennsylvania has an absurdly competitive market, with 17 carriers listed on the indy market and 21 small group carriers...but when you look closer, many of these are simply branches of the same main company.

For instance, fully five of the individual market carriers are variants of "Highmark"...which is actually Pennsylvania's rebranding of Blue Cross Blue Shield. Two are branches of Geisinger and another two are both UPMC. The same is true in the small group market.

And don't even get me started about "Capital Advantage Assurance Company" and "Capital Advantage Insurance Company". Sheesh.

In any event, the overall rate filings average out to rougly a 2.6% premium decrease on the individual market and a 2.3% increase for small group plans, when weighted by carrier market share.

The Kentucky Insurance Dept. has posted KY's preliminary 2021 rate filings for the individual and small group markets, and the requested average rate increases for both are unusually high compared to the other states which have submitted their filings so far. In another unusual development, most of the carriers on each market are being pretty specific about the impact (or lack thereof) on their 2021 rate filings from the COVID-19 pandemic (I only have UnitedHealthcare posted once but they account for three of the seven small group carriers listed.

Anthem Health Plans of KY (individual market):

Just out from Covered California:

California’s Efforts to Build on the Affordable Care Act Lead to a Record-Low Rate Change for the Second Consecutive Year

  • The preliminary rate change for California’s individual market will be 0.6 percent in 2021, which marks a record low for the second consecutive year and follows California’s reforms to build on and strengthen the Affordable Care Act.
  • Covered California’s increased enrollment, driven by state policies and significant investments in marketing and outreach, has resulted in California having one of the healthiest individual market consumer pools and lower costs for consumers.
  • The impact of COVID-19 on health plans’ costs has been less than anticipated as many people deferred or avoided health care services in 2020, and while those costs are rebounding, it now appears the pandemic will have little effect on the total costs of care in California’s individual market for 2020 and 2021.
  • All 11 health insurance companies will return to the market for 2021, and two carriers will expand their coverage areas, giving virtually all Californians a choice of two carriers and 88 percent the ability to choose from three carriers or more.

via the Arkansas Insurance Dept:

Health Insurance Rate Changes for 2021

Insurance companies offering individual and small group health insurance plans are required to file proposed rates with the Arkansas Insurance Department for review and approval before plans can be sold to consumers. 

The Department reviews rates to ensure that the plans are priced appropriately.  Under Arkansas Law (Ark. Code Ann. § 23-79-110),  the Commissioner shall disapprove a rate filing if he/she finds that the rate is not actuarially sound, is excessive, is inadequate, or is unfairly discriminatory.

The Department relies on outside actuarial analysis by a member of the American Academy of Actuaries to help determine whether a rate filing is sound.

Below, you can review information on the proposed rate filings for Plan Year 2020 individual and small group products that comply with the reforms of the Affordable Care Act.  

Users will only be able to view the public details of the filing, as certain portions are deemed confidential by law (Ark. Code Ann. § 23-61-103).

The Colorado Dept. of Insurance has released the state's preliminary rate filings for 2021 individual & small group market policies yesterday.

Overall, it looks like Colorado carriers are asking for a weighted average rate increase of 2.2% on the individual market and 5.7% on the small group market. There's some important tables breaking out exactly which carriers are offering their policies in which counties, and they've even broken out the average rate hikes by rating area, which is unusual to see but takes on special significance in Colorado due to thier unusual Section 1332 reinsurance waiver program, which is more robust in some parts of the state than others (I believe most reinsurance programs are pretty much an across-the-board sort of thing, though I could be wrong about that).

via the Rhode Island Insurance Dept:

2021 Requested Commercial Health Insurance Rates Have Been Submitted to OHIC for Review

CRANSTON, R.I. (July 21st, 2020) – The Office of Health Insurance Commissioner (OHIC) today released the individual, small, and large group market premium rates requested by Rhode Island’s insurers. The requests were filed as part of OHIC’s 2020 rate review and approval process (for rates effective in 2021). Tables 1 – 3, below, summarize the insurers’ requests for 2021, and provide the requested and approved rate changes for the previous two years. Two insurers, Blue Cross Blue Shield of Rhode Island (BCBSRI) and Neighborhood Health Plan of Rhode Island (NHPRI) filed plans to be sold on the individual market for persons who do not receive insurance through their employer. In addition to BCBSRI and NHPRI, UnitedHealthcare and Tufts Health Plan filed small group market plans. Five insurers (BCBSRI, UnitedHealthcare, Tufts Health Plan, Aetna, and Cigna) filed large group rates.

via the Connecticut Insurance Dept:

The Connecticut Insurance Department has posted the initial proposed health insurance rate filings for the 2021 individual and small group markets. There are 14 filings made by 10 health insurers for plans that currently cover about 214,600 people.

Important: As noted below, the 214,600 figure is Connecticut's individual & small group market combined.

Two carriers – Anthem and ConnectiCare Benefits Inc. (CBI) – have filed rates for both individual and small group plans that will be marketed through Access Health CT, the state-sponsored health insurance exchange.

The 2021 rate proposals for the individual and small group market are on average slightly lower than last year:

Unfortunately, it looks like only some of the 2021 ACA individual market premium rate filings have been uploaded to the SERFF database as of today, so I'm unable to calculate anything even close to an accurate weighted average. There are, however, several noteworthy items on the TX market:

Tennessee has also posted their preliminary 2021 rate filings for both the individual and small group markets. Aside from being one of the few states where a significant number of carriers are including any COVID-19 pandemic factor at all (in both markets), Tennessee has several new entrants and one significant withdrawl (I think).

On the individual market, UnitedHealthcare is newly entering, while Cigna is expanding their coverage areas as noted here. Cigna is also newly entering Tennessee's small group market, as is Bright Health Insurance.

Overall, Tennessee carriers are asking for a 10.3% increase on the indy market (the second highest so far after New York's 11.7% average), mostly driven by Blue Cross Blue Shield, which holds a whopping 83% of the market. On the small group market, the average increase is 5.5%.

COVID-19 accounts for 1.7 points of the increase on average in the indy market and 2.6 points in the small group market. This, again, is the highest statewide average COVID impact I've seen after New York state so far.

Last year, thanks to the Section 1332 Reinsurance waiver allowed for by the ACA, Montana health insurance carriers reduced their premiums for 2020 by 13.1% on average on the individual market, while raising them by 7% on the small group market (which the reinsurance program doesn't impact).

For 2021, avg. premiums are going up again, but only by a nominal amount...the requested increases average 3.2% for the individual market and just 2.4% for small group carriers:

The good news out of Minnesota is that the Commerce Dept. has published the preliminary 2021 average rate changes for both the individual and small group markets in a simple table.

The bad news is that they haven't published any of the actual actuarial memos or templates which include the two other critical pieces of data I need to run my analysis: The current effectuated enrollee totals for each carrier, and what (if any) impact the COVID-19 pandemic had on the proposed rate changes.

I was able to estimate the former by looking at MNsure's June executive board meeting slide deck, which breaks out the on-exchange enrollment by carrier by percentage. Unfortunately, this doesn't include off-exhange enrollment. Minnesota's total individual market was around 155,000 people a year ago, so the odds are that nearly 1/3 of the total market is missing below. I also have no idea about any COVID-19 factor in the rate filings yet.

Hawaii only has two carriers participating in the Individual health insurance market. For 2020, they're reducing unsubsidized premiums by 1.7%

COVID-19 isn't listed as a factor at all by either of the carriers, nor by any of the small group carriers in Hawaii either...which makes total sense since Hawaii has the lowest rate of COVID-19 infection in the country.

The small group carriers are requesting a weighted average reduction of 2% as well, although one of the four doesn't have their actual rate change or current enrollment available yet, so this could change.

Every year, I spend months painstakingly tracking every insurance carrier rate filing for the following year to determine just how much average insurance policy premiums on the individual market are projected to increase or decrease.

Carriers jump in and out of the market, their tendency repeatedly revise their requests, and the confusing blizzard of actual filing forms which sometimes make it next to impossible to find the specific data I need. The actual data I need to compile my estimates are actually fairly simple, however. I really only need three pieces of information for each carrier:

New Mexico is the latest state to post their preliminary 2021 rate change filings for both the individual and small group markets. There's several key things to note here:

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